Management 101: What You Need to Know About Stability Strategies – an Analysis of an Absence of Significant Changes

This briefing on Stability Strategies was prepared by Jordan Hymel while a Business Administration major in the College of Business at Southeastern Louisiana University.

Introduction

A corporation may choose stability over growth by making little to no changes to its overall direction. This report will give you the top ten reasons of why a company may choose an absence of significant changes. It will explain the different types of stability strategies and how to implement them into a company’s plan. Furthermore, it will include a video that explains the idea of stability and how to achieve stability.

The Idea in a Nutshell

Stability strategy is best known for what it is not. Stability strategies consist of little to no changes to a company’s overall direction. Even though, many people see this as a lack of strategy it can be very successful in a stable environment. In this strategy a company will serve its same market and customers while maintaining their market share. Furthermore, it is no change in its product line, markets, or functions. A company will mainly use this strategy in the mature stage of its company’s life.

The Top 10 Things You Need to Know About Stability Strategies

1. Stability strategy consists of three questions that a company should ask itself. Should we expand, cut back, or continue our operations unchanged? Should we concentrate our activities within our current industry, or should we diversify into other industries? If we want to grow and expand nationally and/or globally, should we do so through internal development or through external acquisitions, mergers, or strategic alliance? These questions play a vital role into deciding whether or not to use one of the stability strategies.

2. One of the stability strategies is Pause/Proceed with Caution Strategy. This strategy is a time out—an opportunity to rest before continuing a growth or retrenchment strategy. It is usually a temporary strategy until the environment becomes more hospitable or to enable a company to consolidate its resources before a time of rapid growth. Only incremental improvements will be used until the environment becomes right for growth.